MercadoLibre (NASDAQ: MELI) and CafePress (NASDAQ:PRSS) are both e-commerce & auction services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, risk, profitability and dividends.

Profitability

This table compares MercadoLibre and CafePress’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MercadoLibre 10.91% 34.78% 10.33%
CafePress -7.63% -16.72% -13.02%

Volatility and Risk

MercadoLibre has a beta of 2.04, meaning that its share price is 104% more volatile than the S&P 500. Comparatively, CafePress has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Dividends

MercadoLibre pays an annual dividend of $0.60 per share and has a dividend yield of 0.2%. CafePress does not pay a dividend. MercadoLibre pays out 19.9% of its earnings in the form of a dividend.

Insider and Institutional Ownership

84.6% of MercadoLibre shares are held by institutional investors. Comparatively, 10.8% of CafePress shares are held by institutional investors. 0.4% of MercadoLibre shares are held by company insiders. Comparatively, 17.3% of CafePress shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares MercadoLibre and CafePress’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
MercadoLibre $844.40 million 14.11 $136.36 million $3.01 89.61
CafePress $102.21 million 0.31 -$26.47 million ($0.43) -4.33

MercadoLibre has higher revenue and earnings than CafePress. CafePress is trading at a lower price-to-earnings ratio than MercadoLibre, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and target prices for MercadoLibre and CafePress, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MercadoLibre 0 5 7 0 2.58
CafePress 0 1 0 0 2.00

MercadoLibre presently has a consensus price target of $267.42, indicating a potential downside of 0.86%. CafePress has a consensus price target of $3.50, indicating a potential upside of 88.17%. Given CafePress’ higher probable upside, analysts plainly believe CafePress is more favorable than MercadoLibre.

Summary

MercadoLibre beats CafePress on 12 of the 15 factors compared between the two stocks.

MercadoLibre Company Profile

MercadoLibre, Inc. is an e-commerce company. The Company enables commerce through its marketplace platform in Latin America, which is designed to provide users with a portfolio of services to facilitate commercial transactions. Its geographic segments are Brazil, Argentina, Mexico Venezuela and Other Countries (which includes Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Peru, Portugal, Guatemala, Bolivia, Paraguay, Uruguay and the United States of America). It also operates online commerce platforms in the Dominican Republic, Honduras, Nicaragua, Salvador, Panama, Bolivia, Guatemala, Paraguay and Portugal. It offers an ecosystem of six integrated e-commerce services: the MercadoLibre Marketplace, the MercadoLibre Classifieds Service, the MercadoPago payments solution, the MercadoLibre advertising program, the MercadoShops online Webstores solution and the MercadoEnvios shipping service.

CafePress Company Profile

CafePress Inc. is an online retailer of personalized products offering various gifts and accessories, including t-shirts and apparel, mugs and drinkware, and home goods, such as custom shower curtains and bed coverings. The Company conducts its business on its primary United States-based domain, CafePress.com, and also operates CafePress branded Websites for the markets in the United Kingdom, Canada and Australia. It also sells CafePress branded products through other online retail partners. Its products are customized with designs contributed through various means, including crowd-sourced user generated content, stock art licenses and licensed content relationships with entertainment companies and brands. Its facility in Louisville, Kentucky has technology and manufacturing processes that enables it to provide customized products that are individually built to order. The Company’s processes enable it to produce a range of merchandise.

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